Superior Group of Companies, Inc. (NASDAQ:SGC) Q4 2022 Earnings Call Transcript

Mike Koempel: Hi, Tim. It’s Mike. I’ll start and then Michael can add. We certainly hope it’s conservative as you’re calling out. There is, as we said in our prepared remarks, we are cautiously optimistic about the year, but as Michael mentioned before, there’s varying points of view on the economic outlook. And so, we’re obviously we believe that our range is realistic. We are certainly as a management team going to work very hard to exceed that range. But we believe it’s a realistic range as we look ahead for the year. As you call it out, we’ve taken a number of price increases, which started earlier in 2022. And that is factored in. And we are factoring in to our thinking that the healthcare apparel business will have a rebound.

As we mentioned, there’s we expect some softness to continue in the branded product segment here in the first half of the year with that rebounding in the back half. But again, I think overall, we feel that it’s a realistic range based on what we know today. And again, it’s a team be working very diligently to exceed that. Pass it over to Michael.

Michael Benstock: Let me speak about each of the segments. So, what could create more upside to that? I’ll give some color to that portion of the question. BAMKO, as we’ve said, on previous calls, is accelerating their efforts with respect to recruiting sales representatives. So far, I can tell you this year, they’ve been very successful through the first two months, exceeding the number of reps that they’ve been able to create, in any two-month period in the past. So, if they can continue at the rate they are that could possibly help our branded products revenue in the second half of the year, beyond even our projections. TOG, which is our contact centers, we have employed some new sales strategies and some new sales talent.

That’s up to speed now and we believe that those strategies, which should they be more successful than we even have projected conservatively that could help us. And then, of course, on the healthcare apparel side, we’re launching DTC, and we’re being cautiously optimistic with respect to our level of success. But we realized there’s a ton of market share there to be taken. We have put together I think the Dream Team with respect to people who can execute on a DTC strategy, both from a branding side and a digital side, consumer-facing side, from the President on down in that organization. And they can be wildly more successful than we’ve projected. But we wanted to give realistic guidance based on more of the current economic conditions than what we might be wildly successful at in the future.

Tim Moore: That was very helpful car scenarios, and thanks for ending those details on the sales reps at BAMKO and DTC launch healthcare. For the contact centers, the office crews, how’s the call center in the Dominican Republic been ramping up since it opened in October?

Michael Benstock: Good question. That’s a beta site for us as every new call center is, especially when it’s in a new country. It has yet to prove that what it can do for us. It’s too early in the process, really, for us to fully understand whether it’s going to be as successful as we’ve been in Belize and El Salvador and Jamaica. We have plenty of capacity within all of our centers, because a great deal of our people are still working from home. And our customers, most of our customers, don’t mind them continuing to work from home. So, there’s less pressure on us to push the Dominican sooner than it needs to be pushed. Right now, we’re controlling our costs there, we’re doing a very slow ramp up to make sure that it is what we want it to be.

So, I’d say, we are operational in our building. I don’t know the exact number, I believe it’s less than 30 people right now, and doing a multitude of tasks for a multitude of customers. But give me about six more months ago, and I’ll be able to answer that question more definitively.